Big guns battle over cost of saving banks

THE heavy artillery is out in the war of words with Europe. Yesterday, a leading member of the governing council of the ECB used the pages of the 'Financial Times' to assert that it was right and proper that Irish taxpayers should bear the cost of saving the Irish banks.

THE heavy artillery is out in the war of words with Europe. Yesterday, a leading member of the governing council of the ECB used the pages of the 'Financial Times' to assert that it was right and proper that Irish taxpayers should bear the cost of saving the Irish banks.

One of our own biggest guns, former Taoiseach and EU ambassador John Bruton, has argued that the ECB and the EU Commission could, and should, have done more to rein in Ireland's borrowing binge. He accepts that the ECB's legal powers to intervene were limited, but believes it could have used its undoubted influence to reduce the risks.

One can see why Lorenzo Bini Smaghi would want to make his argument in the 'Financial Times'. That newspaper has been one of the strongest advocates of the view that it is deeply unfair to Irish taxpayers that the lenders to Irish banks -- the bondholders -- are being protected from losses.

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